US auto sales have not yet followed the European lead, and shown an increase versus 2008 levels. And they certainly don't match China's 17% sales increase in H1. But they were down just 11% in July. And Ford did post its first annual sales gain since November 2007.
As the chart shows, all the major manufacturers saw an improving trend. August should also be better, if the government subsidy for scrapping older cars is extended. Equally, GM's news that it is to increase Q3 production by 35% versus Q2 levels will be very welcome to hard-pressed chemical and polymer suppliers.
However, the blog remains cautious about the pace of recovery. Moody's notes that the last major industry incentive programme, after 9/11, increased sales by 35% to an annualised 21.7m. By comparison, July's annualised sales were half this at 11.2m. And Ford CEO Alan Mulally has said he expects 2011's sales to only reach 14.5m, versus 17m in 2007.
Equally, Chrysler, newly emerging from bankruptcy, has decided to double the government's $4500 incentive for older cars, and is also offering the same $4500 discount to any buyer. If this price war continues, suppliers' margins will be the first to feel the pain, especially if crude oil remains strong.